How to find suppliers for your business
Finding good, reliable and affordable suppliers is something that plays a key role in the success of your business model. It is important that you know very well, therefore, how and where to source the materials that will then give you the ability to open your store and sell products to your customers.
The options available to you are many, as are the risks you can take if you make the wrong choice. For the time being, we mention only a few: you may, for example, end up with margins that are too low or you may not receive the goods (or receive them late).
Figuring out which solution is best for your business is up to you. But don’t worry: in the next few lines you will find the most useful tips for understanding how to find suppliers to open a store and thus make the right decision without committing missteps.
How and where to find suppliers
We have already mentioned it: nowadays there are several options for those looking for suppliers to open a store, including online wholesale stores, local, national or, even, international suppliers.
The Web offers you a wide range of solutions from which to choose. For example, you can contact suppliers online who work in the same industry as you on LinkedIn, a social network created specifically to connect businesses and professionals. Even “simple” searching on Google and other search engines can help you figure out the right suppliers for your business (and more importantly, where they are located). Pay special attention to China: there are sites (Alibaba and Aliexpress are the best known, but they are certainly not the only ones) that host suppliers that give you the opportunity to buy products even at low prices. Evaluate each option and eventually choose the one that best meets your specific needs.
Databases are another important way to find suppliers: there are national and international ones and they allow for detailed searches, by business sector, commodity category or even by product.
Don’t underestimate the importance of the offline world: trade shows are still an interesting opportunity to establish business relationships and, therefore, also to find suppliers.
Small and local suppliers
Small, local suppliers have the great advantage of being able to offer you personalized service. As is often the case, there is also another side of the coin: precisely because of this, delivery times are likely to be longer than those who work with more standardized procedures. By buying from local manufacturers you also reduce the delivery radius, while also decreasing the possibility of problems arising, but you must keep in mind that small suppliers cannot always ensure a continuous and consistent supply over time.
Large national suppliers
You can turn to large national suppliers if you are used to or plan to order large quantities on a regular basis. This is certainly a cheaper option for you, but consider that your competitors will probably also use the same suppliers as you.
Even cheaper (at least on paper) are products that are made abroad (for example, as in the aforementioned China). In this case, however, you have to take into account that the delivery time is greatly extended and that you will not have total control over the goods before they are shipped to you.
Importing products: useful tips
If you decide to import goods from abroad, you need to consider some aspects that can decisively impact your business.
For example, you need to accurately calculate import taxes or duties and verify that there are no special constraints related to the products you plan to import. Even and especially in case you decide to import goods from abroad, you need to know every detail related to all the links that make up the production chain. Also, do not forget to consider the ethical aspects, that is, those related, for example, to the possibility that your suppliers do not respect the environment or do not guarantee acceptable working conditions for their employees.
Importing products, as mentioned above, also means accepting all the probable hiccups associated with deliveries: consider the negative consequences of possible delays that your deliveries may suffer and make trade agreements in good time that cover this possibility and provide for appropriate solutions or safeguards.
Produce, purchase or recycle
As we have already pointed out on several occasions, the options available to you when it comes to sourcing materials are many. In some cases, instead of buying and reselling, it may prove more useful and advantageous to produce them yourself. Consider this as well, but opt for this solution only in case it really provides you with greater utility or convenience: making products and, therefore, investing money and time without having the opportunity to first assess market demand may prove to be a big gamble.
Recycling is another option to consider: for some types of business, using products and materials that have already been used and repurposed can be a cheaper and more convenient solution, as well as more ethical and sustainable. Again, however, consider the “cons” as well: ensuring the quality and safety of products, in this case, is not always easy.
There is, then, another possible solution: dropshipping. This is a particular mode of sales in which products are sold without having them physically in a storage warehouse: this means that the seller does not materially own the product, but offers it to consumers by acting as a liaison between them and the supplier with whom he has previously entered into a business agreement. The advantage of this solution is that it does not require a large initial investment.
How to contact a supplier to open a store
To know how to contact a supplier to open your store, you need to know precisely the role of the person you are going to contact.
It is, in fact, a process within which several figures act. The main ones are: the manufacturer, the wholesaler and the retailer. Let’s start with the latter figure, with whom you probably recognize yourself: this is the one who buys products (usually from the wholesaler) and resells them in his physical store or online to end consumers. The wholesaler (also called distributor), on the other hand, is the one who buys the goods directly from the manufacturer, paying the amount agreed upon with him, and then resells them to the retailer. Finally, the manufacturer is the one who physically makes the products that will then be sold to the wholesaler, then to the shopkeeper, and then to the end consumers.
With each step (from producer to wholesaler and from wholesaler to retailer, as well as, for that matter, from retailer to end consumer), evidently, there is a corresponding price increase. At this point, you are probably asking yourself a question: why can’t I contact the manufacturer directly? Of course you can, but this option is not always the most convenient, as it might now appear to you on paper.
In many cases, manufacturers require the purchase of a large quantity of goods, and a retailer cannot always afford to do so and run the risk of seeing his initial investment wasted. Not only that, turning to a wholesaler and not to a manufacturer gives you the opportunity to have access to a wide variety of products, with different characteristics and specificities, because wholesalers generally turn to different manufacturers to make their “catalog” richer and more varied.
Making a wide range of products available is one of the requirements that make a supplier a good one, but it is not the only one. It must, first of all, be cost-effective-that is, it must assure you of prices that allow you to have a good profit margin without needing to raise prices excessively to the end consumer. Next, it is important that it is reliable: this means that it must offer good quality products and timely and fast delivery.
One aspect in particular to consider, as mentioned earlier, is the minimum order quantity: especially when you are just starting out, your budget is not large, and your approach is rightly more cautious to test market response, it is essential to be able to order limited quantities of products. This allows you to avoid wasting resources and provides savings in inventory management, although you will probably have to forego the discounts generally provided for larger orders.
In the event that, upon initial search, you do not find suppliers willing to allow minimum orders, remember that you can always negotiate and attempt to extract the most advantageous deal for you anyway. Consider and enter into trade agreements with several wholesalers, but also make it clear that it is in your interest to reach an agreement with each of them that is as long-lasting (and thus, mutually beneficial) as possible.
Build your network of contacts and try hard to gain and maintain a good reputation. Face-to-face contact, for those who want to understand how to find suppliers to set up store, is crucial: take time to personally visit companies that might partner with you and make sure they understand your needs (and that you understand theirs). Remember Zig Ziglar‘s phrase:
“If people like you they will listen to you, but if they trust you, they will do business with you.”